News : Sanctions
- Published: Wednesday, 04 May 2016
By INU Staff
INU - In the midst of South Korean President Park Geun-hye’s visit to Tehran, the Iranian government announced that its oil exports to the Asian country had increased four-fold between January and April, to 400,000 barrels per day. Such figures serve to suggest that the two countries joint goal of increasing overall trade and tourism to about 18 billion dollars per year may be realistic. This target represents about three times the current level of trade, which has been held down by South Korea’s compliance with economic sanctions led by its longstanding ally the United States.
Radio Free Europe / Radio Liberty notes that Iranian Supreme Leader Ali Khamenei used President Park’s visit as a prop in his ongoing defiance of US influence. “Relations between Iran and South Korea should not be dependent on sanctions or influenced by the United States or any grudges the U.S. may hold,” Khamenei said via his official website. But Park’s visit, the first by a South Korean head of state since the two countries established diplomatic relations in 1962, clearly came in response to the climate created by the Iran nuclear deal and by US efforts to show other countries that they are free to invest in Iran.
This growing sense of economic freedom is a source of anxiety for many of Iran’s adversaries, who see it as a windfall for a regime that may channel much of the resulting wealth into regional aggression and support for Islamic terrorism. Stories of new trade agreements with and payments to the Islamic Republic continue to trickle out of many corners of the globe, and will presumably continue to do so until such time as relations between Iran and the US deteriorate significantly.
At roughly the same time that it was announced that President Park had come away from her Iran visit with about 60 new trade deals, the Times of India reported that that country had completed an agreement with Iran that will result in India not only clearing 6.5 billion dollars’ worth of oil payments that were deferred under the sanctions regime, but also paying 1.5 percent interest on that amount. Indian officials pointed out that this interest, which Iran requested to make up for perceived foreign exchange losses, was not seen as legitimate by the Indian government but was accepted anyway as a “gesture of goodwill.”
Such deferent agreements arguably reflect the level of eagerness that exists among many foreign officials regarding the prospect of reclaiming access to Iranian oil exports. But while critics of the Iranian regime may focus on the leverage that this provides the Islamic Republic over others, some analysts are more optimistic insofar as they judge that leverage as working in both directions. That is, Iran’s macroeconomic needs may be a factor that constrains foreign policy activities that would otherwise alienate its newfound partners.
President Park’s visit led some commentators to highlight one such situation, namely the well-recognized friendship between the Iranian regime and North Korea, especially as it concerned the two country’s nuclear weapons efforts. Forbes pointed out on Tuesday that Iranian scientists and officials had repeatedly been observed at North Korean nuclear tests, and that the two countries had apparently exchanged information about nuclear weapon components and enrichment processes.
But Forbes also claims that since Iran and South Korean began exploring the expansion of bilateral cooperation, instances of cooperation between Iran and the North Korean communist dictatorship had decreased somewhat. And while this qualified result may be little comfort to those who see Iran as gaining access to money that it can use to ramp up its clandestine nuclear activities, it may nonetheless point to the potential for the further impact of South Korean trade on Tehran’s foreign policy decision-making.